- (1.) "Whether the order of Tribunal is vitiated on account of non -consideration of material evidence and consideration of totally irrelevant material in reducing the additions made in the accounts of assessee by AO -
(2.) THE necessary facts are that the assessee filed the return which was taken up for scrutiny, and notices were issued under s. 143(2). Thereafter the assessment order was passed by the learned AO finding discrepancy in the purchase of raw material. Likewise discrepancy was also found in the sale of the product, in the sense that the sale shown by the assessee was found to be not confirmed by the respective purchasers, inasmuch as one purchaser was shown to have sold the goods worth Rs. 2,300 but the purchaser had denied. Likewise about other purchaser the assessee had shown to have sold goods worth Rs. 1,31,725 but the purchaser has confirmed only Rs. 77,125. Thus, on the other hand, the excessive sale was shown by the assessee. However, the AO made additions. The assessment order was challenged in appeal. The learned CIT(A) partly allowed the appeal, and reduced the addition.
(3.) BOTH the parties filed appeals in the Tribunal. The learned Tribunal found that it was not in dispute that the assessee had recorded bogus purchase in his books of accounts, it was found that bogus purchase was shown with a view to show excessive expenses in the purchase of raw material. However, the books of accounts as rejected by the authorities below was upheld. The next question was considered about the determination of GP rate, and the learned Tribunal considered the fact that in the previous year the GP rate applied was 7.09 per cent, and the same was applied by the learned CIT(A) this year also, that was upheld. For the purpose of satisfying the question as formulated, the learned counsel for the Revenue could not show as to what material has not been considered by the learned Tribunal, and what irrelevant material has been considered in reducing the additions made. Rather an overall consideration of the orders of the AO, the CIT(A) and the learned Tribunal does show, that on account of the assessee having shown bogus purchases, the books of accounts had been rejected, and the matter was proceeded under s. 145. Then, the question remained of determining the income on the basis of best judgment assessment. At this point, it is significant to note, that the gross sales figure for the relevant year is not in controversy, in the sense, that whatever bogus sales have been found by the AO, if they were to be considered literally, they would have reduced the figure of sale, and there is no material or finding, or any indication, to show that the gross sale was shown by the assessee at any deflated figure.;